Investing.com - The dollar was lower against the euro and the pound on Tuesday, but sentiment on the euro and sterling remained fragile ahead of upcoming policy meetings by the European Central Bank and the Bank of England later in the week.
During European afternoon trade, the dollar was lower against the euro, with EUR/USD easing up 0.13% to 1.3044.
The euro hit session highs earlier after data showed that Germany's services purchasing managers' index rose to 54.7 in February, up from a preliminary reading of 54.1.
The final euro zone services PMI rose to 47.9 from a preliminary reading of 47.3.
Another report showed that euro zone retail sales rose 1.2% in January, well above expectations for a 0.2% gain.
But the single currency remained under pressure amid concerns that Italy will be unable to pass structural reforms and austerity measures as the country edged closer to fresh elections, following inconclusive elections last week.
Worries over the outlook for Italy, the euro zone's third largest economy, fuelled speculation over a possible rate cut by the ECB in the coming months.
The dollar was lower against the pound, with GBP/USD rising 0.36% to 1.5166 after data showed that the U.K. services PMI unexpectedly rose to a five-month high in February, allaying fears over a possible triple-dip recession.
The U.K. services PMI rose to 51.8 from 51.5 in January, against expectations for a decline to 51.0.
Elsewhere, the dollar was lower against the yen, with USD/JPY down 0.41% to 93.08. The dollar remained supported as expectations for more aggressive easing measures by the Bank of Japan remained intact.
The greenback edged lower against the Swiss franc with USD/CHF dipping 0.06% to 0.9402.
The greenback was mixed against its Canadian, Australian and New Zealand counterparts, with USD/CAD slipping 0.09% to 1.0244, AUD/USD climbing 0.49% to 1.0244 and NZD/USD edging up 0.01% to 0.8276.
Earlier Tuesday, the Reserve Bank of Australia left rates on hold at 3%, saying that the bank's current monetary policy is appropriate.
The announcement came after official data showed that retail sales in Australia rose 0.9% in January, more than the expected 0.4% increase.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.24% to 82.05.
The Institute of Supply Management was to release a report on U.S. service sector activity later in the trading day.
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